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1. Constraints to Domestic Enterprise Financing in Post-Conflict Liberia

Author:
John Gorlorwulu
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Countries emerging from protracted and devastating conflicts are often seen as needing significant external intervention in their financial markets to rebuild their private sector and promote quick and effective economic recovery. Despite enormous challenges, the provision of credit or the implementation of various lending schemes often dominate efforts to promote domestic private-sector recovery in the immediate aftermath of conflict. This approach raises a number of questions: First, how effective are loan programs in the development of domestic enterprises in the immediate aftermath of conflicts? Second, can loan programs work without significant improvements in the business climate? How sensitive is the design of lending programs to the success of domestic enterprise development projects following devastating conflicts? This paper explores the experience of the Liberian Enterprise Development Finance Company, which was established in 2007 to provide medium-and long-term credit to small and medium domestic enterprises. In addition to shedding light on the challenges such an enterprise faces in a post conflict environment, the paper explores whether the strategies employed are effective and if there are opportunities for effecting remedial changes that could improve the outcomes of such a program in post-conflict environments generally.
Topic:
Conflict Resolution, Civil War, Development, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa and Liberia

2. Development Assistance, Institution Building, and Social Cohesion after Civil War: Evidence from a Field Experiment in Liberia

Author:
Macartan Humphreys, James Fearon, and Jeremy M. Weinstein
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Can brief, foreign-funded efforts to build local institutions have positive effects on local patterns of governance, cooperation, and well-being? Prior research suggests that such small-scale, externally driven interventions are unlikely to substantially alter patterns of social interaction in a community, and that the ability of a community to act collectively is the result of a slow and necessarily indigenous process. We address this question using a randomized field experiment to assess the effects of a community-driven reconstruction (CDR) project carried out by the International Rescue Committee (IRC) in northern Liberia. The project attempted to build democratic, community-level institutions for making and implementing decisions about local public goods. We find powerful evidence that the program was successful in increasing social cohesion, some evidence that it reinforced democratic political attitudes and increased confidence in local decision-making procedures, but only weak evidence that material well-being was positively affected. There is essentially no evidence of adverse effects. *Jeremy Weinstein is on leave from the Center for Global Development.
Topic:
Conflict Resolution, Civil Society, Civil War, Development, and Foreign Aid
Political Geography:
Africa and Liberia